New Zimbabwe.com

Zimbabwe’s surging internet costs wreak havoc on small businesses

Spread This News

Bloomberg


When a sharp hike in Zimbabwe’s internet costs drove Joyce Kapvumfuti’s small catering enterprise offline for a week, orders for her wedding cakes, business lunches and frosted cupcakes collapsed.

“I used to get at least five customers a week when advertising and marketing online, but when … I don’t have internet data, I’ll be lucky if I manage to get two,” Kapvumfuti said at her home in the eastern city of Mutare.

As a result, she said she now spends much of her modest earnings on data – meaning she is struggling to cover other basic expenses such as rent and food for her two children.

Internet costs are skyrocketing in Zimbabwe amid real annual inflation estimated unofficially at about 1,000%, making it harder for people to access basic services, study or make a living from online enterprises like Kapvumfuti’s or remote work.

Econet Wireless Zimbabwe, the country’s main mobile operator, increased data prices by 100% in October 2023, with 1 gigabyte (GB) of data now averaging $3.54.

State-owned NetOne, the second-biggest mobile operator, has also increased data prices by a similar percentage.

“When internet data bundles were increased, I wasn’t prepared. I found myself offline,” said Kapvumfuti as she scrolled through her smartphone, explaining that most customers for her home-based business find her through Facebook, TikTok, Instagram and WhatsApp.

October’s increase triggered demands by digital rights and anti-poverty campaigners for the government and the Potraz telecoms regulator to take action to bring down prices and tackle a deepening digital divide.

“Internet access has been reduced to a luxury that only the elite few can afford,” said digital rights lawyer Nompilo Simanje, who has worked previously with the Zimbabwe chapter of the Media Institute of Southern Africa (MISA), a non-governmental organisation.

“We are in the digital age and every ordinary person needs it in their day-to-day lives,” she said, noting that data costs had risen sharply during the last three years.

‘So expensive’

Average data costs in Zimbabwe are higher than in neighbouring countries, far exceeding the average of $1.81 for 1GB in South Africa, $0.38 in Malawi or $0.78 in Mozambique and $1.26 in Eswatini, according to the Worldwide Mobile Data Pricing 2023 report released by Cable.co.uk.

With exchange rate issues complicating the picture, Potraz has dismissed the Cable findings and said the average cost in Zimbabwe is $3.21 per gigabyte – below average in southern Africa.

The doubling of Econet’s prices in October came only six months after another hike in April 2023, which had already put internet access beyond the reach of many Zimbabweans, said Toneo Rutsito, a chairperson of the Zimbabwe Online Content Creators.

“The increases make it difficult for both the content creator and consumer to access the internet, as they become inhibitive. It kills the industry,” said Rutsito, whose group is in contact with Potraz to demand lower tariffs.

Internet penetration was already lower than elsewhere in the region at 70.1%, compared with 72.3% in South Africa, according to a 2023 Potraz report.

The price rise has put a further squeeze on household budgets in Zimbabwe, where average monthly wages for civil servants are about $200, forcing people to make cuts elsewhere.

Kuda Chisvo, who runs an online fresh vegetable retail business, said he has seen a drop in his orders to customers in the capital, Harare, and surrounding towns due to high internet costs.

No longer able to access the internet on his mobile, 19-year-old high school student Tafadzwa Chaitezvi has to stand outside his father’s workplace in Mutare so he can use his WiFi password to download study books to read offline.

“My father used to buy data for me but he cannot afford it anymore as it is now so expensive. I use the WiFi during weekends when I’m not at school,” said Chaitezvi, who hopes to study electrical engineering.

‘Data must fall’

Soon after the data price hike, an online campaign called the #DataMustFallZW and led by MISA Zimbabwe started trending again on social media platforms.

The campaign was originally launched in 2022 when NetOne hiked its data prices by more than 500% – causing an outcry that eventually led the company to scrap the increase.

“We have given the players awareness (that) this is wrong,” MISA Zimbabwe director Tabani Moyo told the Thomson Reuters Foundation, adding that internet providers and authorities had a duty to formulate prices that are accessible to people on low incomes.

The office of Zimbabwe’s ICT (Information and Communication Technology) minister did not respond to several requests for comment.

Asked to comment, Econet referred to a statement by Potraz, which said the recent hike reflected soaring foreign currency-denominated costs.

The regulator’s director general, Gift Machengete, said the increase was “done in the interest of balancing service affordability and operator viability”.

With no immediate solution in sight, Chaitezvi said his homework struggles will continue.

“My worry is for how long will I keep researching with this borrowed WiFi. It’s not sustainable,” he said.